ASEAN Leaders Warns of Economic Fallout from War and Policy Normalization

East Asian economic leaders warned on Thursday of the risks on the region’s economy outlook and pledged to be committed to market stability.

Finance ministers and central bank governors said in a joint statement said, economic risks included unexpectedly early rises in interest rates “in some advanced nations”, runaway inflation and supply chain disruption on top of the war in Ukraine.

The statement followed annual meetings, held online, of the officials from China, Japan, South Korea and the 10 members of the Association of South East Asian Nations (ASEAN).

The Japanese, Chinese and South Korean officials affirmed their commitment to supporting financial market stability and to long-term fiscal sustainability.

“We must remain on guard against heightening risks to which the regional economic recovery is being exposed … on top of the ongoing Russia-Ukraine conflict and earlier-than-expected monetary policy normalisation in some advanced nations,” it said.

“These factors could become downside risks to the regional economic outlook, causing volatility to financial markets and capital flows.”